Timely filing from foreign countries.

• Author: Chambers, Valrie

A variety of tax consequences may depend on whether a return or other document is timely filed with the IRS. But consider this query: A taxpayer is stuck in Canada due to the pandemic and mails via the Canadian postal service his 2019 tax return on April 15, 2020. Is it timely filed? The answer is yes, but there are intricacies and confusion involved here.

Sec. 7502 currently codifies what some still refer to as the "mailbox rule." Before Sec. 7502's enactment in 1954, whether a document was considered timely filed depended upon the "physical-delivery rule." That is, documents were timely filed only if the document was delivered to the IRS by the due date, because the common law understanding of "filed" meant delivering something to where it needed to get to, not just "sending it off."

Sec. 7502 was enacted in response to disputes about whether a document had indeed been physically delivered to the IRS, intending to eliminate taxpayers' arguments that a document had been appropriately mailed to the IRS with sufficient time for the document to reach the IRS--even if the IRS had no record of receiving it. The enactment of Sec. 7502(a) and its subsequent amendments and regulations created exceptions to the physical-delivery rule, specifically:

* If the IRS in fact receives the document, a U.S. postmark date is deemed the date of delivery, even if the IRS receives the document after the applicable deadline (Sec. 7502(a)(1)), as long as the document was actually mailed before the deadline.

* A document sent by registered or certified U.S. mail is deemed to have been delivered to the IRS, even if the IRS has no record of receiving it, and the date of registration or certification is deemed the postmark date (Sec. 7502(c) and its regulations).

* Documents sent by a designated private delivery service (PDS) receive similar exceptions, under delegated authority to Treasury (Sec. 7502(f) (3)).

* Rules for e-filing electronic postmarks are set forth in Regs. Sec. 301.7502-1(d).

However, afterward, the courts were split as to whether the enactment of Sec. 7502 eliminated the possibility that a taxpayer could rely on other types of evidence that a document had been mailed in a timely manner, when the IRS had no record of receiving the document and the taxpayer had not used registered or certified mail. For instance, could timely mailing be proved through personal testimony or witnesses? The conflicting judicial decisions "left the law in an undesirable...